EU pledges $350 million to Caribbean, amid debate over aid for islands

Reproduced courtesy of Devex.com

Monday, November 27, 2017 —
BRUSSELS — The European Union pledged 300 million euros ($352 million) to the Caribbean islands on Tuesday, as the region rebuilds after consecutive Category 5 hurricanes hit in September. The storms impacted the majority of the Caribbean’s population and 39,000 children remain in need of assistance.

The EU announcement came during a Tuesday morning pledging conference at the United Nations headquarters in New York, with initial reports suggesting at least $1.4 billion had been raised in total. The conference comes amid ongoing debates about how aid is sent to the islands, and who is eligible to receive it.

About one-third of the European support will be new grants from the reserve of the European Development Fund, according to the European Commission, while the rest is made up of prior commitments under the EDF.

The commission said some money will go toward short-term humanitarian relief in Dominica, St Kitts and Nevis, and Cuba, but most will support medium-term reconstruction and rehabilitation in those countries, as well as in Antigua and Barbuda and the overseas countries and territories (OCTs) of EU member states in the Caribbean.

OCTs, such as the British territories of Anguilla and the British Virgin Islands, may receive funding under the EDF, whereas Saint Martin, which is an outermost region of the EU, is eligible for EU Solidarity Fund assistance. The commission is in contact with French authorities on this application, which must come from Paris.

Caribbean representatives pointed out that this creates a situation in which Sint Maarten, an OCT of the Netherlands, is eligible for development assistance under EU rules, but Saint Martin, with which it shares an island, is not.

We are locked in a build-rebuild cycle due to climate change. We are categorized as middle-income countries, but we consider that we are outliers of those economic equations. Sharlene Shillingford-McKlmon, charge d'affaires at the Eastern Caribbean States Mission to the EU

In October, European Commission president Jean-Claude Juncker said that the territories’ different legal statuses should not lead to one side of the island being favored over the other.

He wrote to European Parliament President Antonio Tajani that “The commission will make every effort to ensure complementarities between EU interventions and ease the cooperation and the development of joint projects at a local level.”

Complicating matters further, some of the affected islands are too wealthy to qualify for official development assistance under the rules set by the Development Assistance Committee of the Organisation for Economic Co-operation and Development, as Devex has reported. The commission said it would count its contribution toward its ODA, however, as Dominica, St Kitts and Nevis, Cuba, and Antigua are all considered small island developing states.

U.N. chief António Guterres praised the response of Caribbean governments to the rare, back-to-back storms in remarks during the pledging event. He said he saw “a level of devastation that I have never witnessed before in my life” during recent visits to Dominica, Antigua, and Barbuda. Total recovery needs for these countries, as well as the British Virgin Islands, is estimated to top $5 billion, with infrastructure, housing, and agriculture industries among the most severely damaged.

“It used to be rare to see so many storms of such strength. But unfortunately, just as climate scientists predicted, this is becoming the new normal — even sooner than expected,” Guterres said. “Countries in the Caribbean need support now to rebuild, and to take effective climate action. We need a new generation of infrastructure that is risk-informed, to underpin resilient economies, communities, and livelihoods.”

Financing recovery work in the Caribbean is complicated by the fact that many of the nations are classified as middle income, meaning they have limited access to concessional finance. They also have high levels of debt, Guterres noted.

The donor event at the U.N. Headquarter was convened by CARICOM, the Caribbean member organization that promotes economic integration, and the United Nations Development Programme to attract financial and technical support for long-term reconstruction efforts.

The two Category 5 hurricanes hitting so close together was “unprecedented,” Sharlene Shillingford-McKlmon, charge d'affaires at the Eastern Caribbean States Mission to the EU, told the European Parliament’s development committee Tuesday.

The damage, which shut down agriculture, closed businesses, and enabled the spread of waterborne diseases, left the island of Barbuda uninhabited “for the first time in 300 years,” she said.

More than 90 percent of buildings in Dominica were affected by Hurricane Maria, according to the UNDP. Dominica Prime Minister Roosevelt Skerrit was quoted by U.S. media in October saying “We have lost everything that money can buy.”

Shillingford-McKlmon said the storms had also revealed the shortcomings of development policy in the region, explaining that between 1990 and 2017 the Caribbean has been hit by 328 natural disasters, generating $31 billion in debt for rebuilding.

“We are ranked middle and high income [based on GDP per capita], we lose concessional financing, we self-finance, rebuild, then the hurricane season starts the next year, and then we start the entire process all over again,” she said. “[It’s] a vulnerability that is unending.”

The result, she said, was debt-to-GDP ratios that are often higher than many countries in sub-Saharan Africa.

“We are locked in a build-rebuild cycle due to climate change. We are categorized as middle-income countries, but we consider that we are outliers of those economic equations,” Shillingford-McKlmon said.

“Antigua was about to be graduated from official development assistance in October and Barbuda was destroyed in the space of six hours. What kind of high-income-ness is that?” she asked.

EU development commissioner Neven Mimica said the EU support will help “accelerate recovery, strengthen resilience, and step up progress toward a sustainable economic path.”

On Monday, UNDP administrator Achim Steiner said the beginning of the recovery was “a critical inflection moment for tough decisions on how to do development differently, not only to rebuild, but to rebuild to a more resilient standard.”

“This means not only upgrading damaged infrastructure and houses with climate-resilient technologies and specifications,” Steiner said, “but also the need to strengthen risk governance systems, improve life-line services, strengthen and expand capacities of the private sector, diversify livelihoods, and provide social protection mechanisms for the most vulnerable households and communities.”

Shillingford-McKlmon repeated her call for the creation of “some sort of development instrument, category [or] fund that can help and can be immediately available to countries that are affected by such disasters.” She said this should apply to all islands, irrespective of their sovereign status, “because we are all there and we are all family ... We have to be innovative, we have to think of new instruments.”

The EU pledge follows member states’ support using the EU Civil Protection Mechanism, and more than 2.9 million euros ($3.4 million) worth of humanitarian support, such as shelter, food, and logistics. Pre-existing programs to inject 7 million euros into the budgets of Anguilla and Turks and Caicos were sped up in the wake of the disaster, and a pre-planned payment of 3.5 million euros to Dominica is also pending.

The commission said Mimica met with Caribbean leaders on the sidelines of the conference to discuss their relationship with the EU after the expiration of the Cotonou Agreement, which sets the legal framework for their cooperation, in 2020.

About The Organisation of Eastern Caribbean States

The Organisation of Eastern Caribbean States (OECS) is an International Organisation dedicated to economic harmonisation and integration, protection of human and legal rights, and the encouragement of good governance among independent and non-independent countries in the Eastern Caribbean. The OECS came into being on June 18th 1981, when seven Eastern Caribbean countries signed a treaty agreeing to cooperate with each other while promoting unity and solidarity among its Members. The Treaty became known as the Treaty of Basseterre, so named in honour of the capital city of St. Kitts and Nevis where it was signed. The OECS today, currently has ten members, spread across the Eastern Caribbean comprising Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St. Kitts and Nevis, Saint Lucia, St Vincent and The Grenadines, British Virgin Islands, Anguilla and Martinique.